Exclusive Contracts in the Hospital Setting: A Two-Edged Sword

Hospitals routinely enter into contracts with radiology groups for the right to be the exclusive providers of radiologic services at the facilities in exchange for the groups' agreeing to provide and manage all aspects of those services within the hospitals. These exclusive contracts generally result in radiology departments and associated equipment being closed off to physicians who are not part of the contracting groups. Although exclusive contracts offer obvious benefits to the physicians who receive them and obvious disadvantages for those who are excluded, they also present pitfalls for physicians in the chosen group. Part 1 of this article discussed the legal issues raised by exclusive contracts. Part 2 weighs the practical advantages and disadvantages of exclusive contracts for physicians covered and not covered by such contracts and strategies for avoiding them, as well as provisions that can be included in medical staff bylaws to protect physicians from the automatic termination of privileges when a hospital enters into or terminates an exclusive contract. The remainder of the article provides tips on specific provisions of exclusive contracts that should be included or avoided.